Rwanda, Burundi embrace EAC Customs Union

By John Oyuke

Two States are set to join the East African Community (EAC) Customs Union tomorrow, two years after they were integrated into the economic bloc.

The two signed the Accession treaties on July 1, 2007, and made a commitment to commence implementation of the Customs Union on July 1, this year.

The director general of the EAC Directorate of Customs and Trade Peter Kiguta confirmed last week that the two countries were ready to commence the Customs Union as per their earlier commitment.

The Directorate undertook a mission to Rwanda and Burundi to assess the level of preparedness on implementation of the Customs union between June 8 and 12.

"All the government institutions and officials in charge of implementing the Customs Union, as well as the private sector that we met during the mission, were ready for July 1," he asserted in a statement issued by the EAC Secretariat in Arusha.

Official Launch Announced

The secretariat also announced that official launching of the Union in the two countries would be held on July 6, this year.

The launch activities would be held simultaneously in Kigali (Rwanda) and Bujumbura (Burundi).

The EAC protocol on the establishment of the Customs Union came into force on January 1, 2005 in the three founding member states— Tanzania, Uganda and Kenya.

The Union’s main objective is to promote intra EAC trade, enhance production and industrialisation, and promote investment in the region.

The Union’s extension into Rwanda and Burundi will, further, enlarge region’s market and provide an incentive for increased production and trade by the private sector.

Positive Expectations

Mr Kiguta said by implementing the common external tariff, Rwanda’s tariff regime would be rationalised with the other EAC partner States to enhance business predictability and planning.

From left, EAC Heads of State: Yoweri Museveni, Mwai Kibaki and Jakaya Kikwete at a past summit in Arusha. Rwanda and Burundi are the latest among EAC states to embrace the Customs Union.

The common tariff regime is believed to enhance compliances because it eliminates price differentials arising out of differing tariff rates.

EAC Secretary-General Juma Mwapachu said while Rwanda and Burundi had been participating in programmes of the EAC, the Customs union is a tangible integration that will accrue into benefits for the public and private sector.

Kiguta said during the meeting with the executive members of the Chamber of Commerce and Investment in Bujumbura, the members expressed their positive expectations of the Customs Union and in particular the direct benefits which would mitigate competitiveness challenges.

These included zero tariffs on raw materials and capital, valuation of imports based on Cost, Insurance and Freight value at the first port of entry into the EAC, exclusion of airfreight in computation of duty on goods imported by air and investment inflows that comes with a custom union.

Non-tariff barriers

The private sector in Burundi also indicated the challenges ahead such as the threat to their nascent industry, language barrier and non-tariff barriers.

In this context, Kiguta disclosed the private sector had developed a list of raw materials and sensitive goods that will be presented to the EAC policy-making organ; the Council of Ministers for consideration and further guidance.

Tax Watchdog

He said Burundi had also indicated their readiness to establish an operational Revenue Authority starting Wednesday.

Revenue authorities would be responsible for implementation of the EAC Customs Union within respective member countries.

The tax watchdogs, Kiguta observed, would be the focal points from where the business community, stakeholders and the general public will get assistance regarding the Customs matters.

The EAC Customs Management Act, 2004, the EAC Common External Tariff Handbook, the Internal Tariff Handbook, the Rules of Origin, and the EAC Customs Union Protocol can be obtained from the tax authorities and other centres as would be advised by them, Kiguta said.